Differences Between Home Warranties and Homeowners Insurance
Buying a home is one of the best decisions one can make in their lifetime, but it does not come without a ton of uncertainty. How do we make the uncertainty less stressful? Everyone tells us to purchase a great insurance policy on our house, and most banks providing a mortgage will require it to keep their investment safe. If you have a seasoned real estate agent who has seen a few too many things in the real estate market, they’ll tell you a home warranty is a must-have.
Wondering what the difference between them is? Most think homeowners insurance and home warranties are the same thing. We’re here to tell you they are absolutely NOT the same, and having both does wonders for your frame of mind as a homeowner. Less worrying, more enjoying!
What are Home Warranties?
A home warranty is a service contract that saves you money in the long run as it covers replacements and repairs of your house’s systems and appliances. After assessing the house's plumbing, electrical, air conditioning, and heating, along with each appliance, and even the garage door opener, there may be some red flags that could cost you bundles if nothing has a manufacturer’s warranty.
If the systems and appliances are in decent condition, it’ll make sense to get a home warranty if you aren’t thrilled at the thought of having to cover repairs and replacements if these systems and appliances decide to stop working at the most inconvenient times due to regular wear and tear. After many years in the real estate industry, we can tell you, appliances and household systems always die when you’re strapped for cash or in the middle of a heat wave. Knowing you can call your home warranty company for help and they’ll handle all the details, without you having to fork over even more money to cover the repair and replacement costs provides peace of mind.
Home warranties are customizable, too. You can add on options to the standard warranty. Most home warranty companies offer a discounting for bundling options as well. Often the seller will pay for the home warranty so that is an option for you to consider when negotiating.
How are Home Warranties Different than Homeowners Insurance
Homeowners insurance covers damages and loss from a fire, or a flood caused by burst or leaky pipes, and trees falling onto your roof. But if your dishwasher decides to break down, your homeowners insurance won’t cover it. What will cover the repair or replacement of the dishwasher is a home warranty. Having BOTH homeowners insurance and a home warranty can create a much more peaceful home ownership experience in the long run!
Getting a Home Warranty is Worth It
Many people skip the home warranty if they have individual warranties for their appliances, AC and Heating systems, and believe they’re good with do-it-yourself repairs on plumbing and electrical systems. However, warranties from a manufacturer usually last just a couple of years, and plumbing and electrical systems are far more elaborate than just the toilet and lightswitches around your home. There’s a lot that can go wrong behind the walls, and when those systems break, it usually requires more than just repairs. Most often it takes replacements. Hot water heaters aren’t cheap!
A home warranty can help alleviate the stress associated with expensive household repairs and replacements of all the big ticket items your house is filled with. It’s worth having less to worry about. Instead of always freaking out when hot water stops coming out of the faucet, you can just sit back and allow someone else to handle repairs and replacements! Always be sure to read the fine print though as not everything is covered on a home warranty there are some exclusions and you’ll want to know what those exclusions are.
Home Warranty Help
Researching home warranty companies can be tedious and confusing. Jan Taylor, Assistant Vice President at Fidelity National Home Warranty / CRES & Disclosure Source NHD who loves working with Be Happy TC because we take great pride in our knowledge of the real estate industry, recommends meeting with at least two different companies to find not just the right policy, but also the best option for an amazing customer service experience. Our team agrees that customer service is always a top priority!
